GOUTAM DEY,NORTH 24-PGS. vs. I.T.O., WARD - 50(1),, KOLKATA

For that on the facts of the case, the Assessing Officer issuing the notices u/s. 143(2) of the I.T. Act, 1961 on 24.09.2018 & 27.09.2018 did not have jurisdiction over the case of the assessee, as there was no mention of the type of scrutiny under which the case of the assessee has been selected, hence the notice is bad-in-law and the assessment order passed on the basis of such notice is baseless and should be quashed.

For that on the facts of the case, the A.O. was wrong in issuing notice u/s. 143(2) on 24.09.2018 & 27.09.2018 without complying to the CBDT Instruction F. No. 225/157/2017/ITA-II dated 23.06.2017and so the notice issued u/s. 143(2) is not valid as per Provision of Act.

The ld. Counsel for the assessee submitted that the said ground is purely a legal issue and the assessee is within his legal right to raise the same before any of the appellate authority at any stage whatsoever. The ld. Counsel for the assessee submitted that the notice u/s 143(2) of the Act has been issued in an invalid format in violation to the CBDT instruction no. F. No. 225/157/2017/ITA-II Dated 23-06-2017. Accordingly, the assessment order passed consequently is void ab initio, ultra virus and nullity in the eyes of law. The ld. Counsel for the assessee submitted that since the issue raised is legal issue which goes to the root of the matter and since no further verification of facts is required to be done from any quarter whatsoever, the legal ground raised by the assessee may kindly be admitted for adjudication. In defense of his arguments the ld. AR

The ld. DR on the other hand submitted that the issue was not raised before any of the authorities below and therefore, may kindly be restored to the file of any of the authorities below for adjudication.

After hearing the rival contentions and perusing the material on record, we find that the assessee has raised an additional ground of appeal challenging the validity of the notice issued u/s 143(2) of the Act being in an invalid format and in our opinion the issued raised in the additional ground is a purely a legal issue qua which all the facts are available in the appeal folder and no further verification of facts are required from any quarter whatsoever. In our considered view the assessee is at liberty to raise any legal issue before any appellate authority for the first time even when the same has not been raised before the lower authorities. The case of the assessee is squarely covered by the decisions of the Apex court in the case of i) Jute Corporation of India Ltd. Vs CIT (supra) ii) National Thermal Power Co. Ltd v. CIT (supra) and also by the decision of Hon’ble Calcutta High Court in PCIT vs. Britannia Industries Ltd. (supra). Therefore, we are inclined to admit the same for adjudication.

The ld. AR vehemently submitted that the notice u/s 143(2) of the Act dated 24.09.2018, does not specify whether it is a limited scrutiny or a complete scrutiny or a compulsory manual scrutiny. The ld. AR submitted that the CBDT has issued specific instruction vide instruction no. F. No. 225/157/2017/ITA-II Dated 23-06-2017, that

The ld. DR on the other hand submitted that this is a computer- generated notice and the non-mentioning of the fact of either limited or complete scrutiny or compulsory manual scrutiny would not render the issuance of notice u/s 143(2) of the Act as invalid. Therefore, additional ground raised by the assessee may kindly be dismissed.

After hearing the rival contentions and perusing the materials available on record, we find that undisputedly the notice issued u/s 143(2) of the Act dated 24.09.2018, specifies only computer aided scrutiny selection which neither mentioned it either to be a limited or a complete scrutiny nor compulsory manual scrutiny. Thus, the said notice has been issued in violation of the instruction issued by CBDT as noted above. In our opinion, the revenue authorities have to follow the instruction issued by CBDT and violation thereto would certainly render the notice as invalid with the result all the consequential proceeding would also be invalid. The case of the assessee find support from the decision of the co-ordinate Bench in the case of Tapas Kumar Das Vs. ITO (supra), wherein a similar issue has been decided in favour of the assessee. The operative part of the same is extracted below: -

Since, we have allowed the appeal of the assessee on legal issue, the other grounds raised on merit are not being adjudicated at this stage and are being left open to be decided at the later stage if need arises for the same.

In the result, the appeal of the assessee is allowed.